Oracle is said to offer big discounts to U.S. government on software

Oracle (NYSE:ORCL) is slashing prices for its software and cloud services for federal agencies, joining other tech giants in offering significant discounts to the government, The Wall Street Journal reported Sunday.

The deal includes a 75% price cut on Oracle’s (NYSE:ORCL) license-based software and an undisclosed but “substantial” discount on its cloud computing platform, according to the General Services Administration.

The GSA, which handles federal procurement, described the agreement as the first to provide government-wide savings on cloud infrastructure, a critical component of modern IT systems. The agency is in talks with other cloud providers to strike similar deals.

Earlier this year, Salesforce (CRM) reduced prices for its Slack messaging app for government use by 90%, while Google (GOOG) (GOOGL), Adobe (ADBE) and Elastic have also offered discounts on software products.

The initiative reflects the Trump administration’s broader effort to modernize federal technology while cutting costs. The White House has prioritized streamlining procurement and upgrading outdated IT systems, many of which still rely on legacy technologies like mainframes.

Oracle’s (NYSE:ORCL) agreement includes access to AI services and support for agencies transitioning to the cloud. The company has been expanding its federal business, recently launching programs to help smaller tech vendors work with the Defense Department.

In 2022, Oracle joined Amazon (AMZN), Google (GOOG) (GOOGL) and Microsoft (MSFT) in winning a major cloud services contract with the Pentagon, offering competitive commercial pricing. The new GSA deal allows the Defense Department to access discounted Oracle (ORCL) cloud services as well.

Oracle (ORCL) co-founder Larry Ellison has strengthened ties with the administration, including participating in a White House event earlier this year to promote a data center initiative for AI development.

The government partnership could help Oracle (ORCL) boost adoption of its cloud platform as it competes with Amazon Web Services (AMZN) and Microsoft (MSFT) Azure. Oracle forecasts 40% growth in its cloud business this fiscal year, signaling potential gains in the competitive cloud market, the Journal reported.